By Bob Bauman JD, International Living
Most people are conditioned to see second passports as something for crooks, thanks to a steady drumbeat of negativity from the U.S. government and the mainstream media. But they’re not.
When you hold a second passport, a world of opportunities opens up to help you protect your finances, safeguard your privacy, and to grow your financial nest egg free from high taxes.
Here are just some of the benefits of having a second passport:
A Safe Guard in Troubled Times
Acquiring a second passport and/or citizenship issued by a peaceful, non-controversial country, such as Canada or Sweden, might save your life in times of political unrest, civil war, or other situations. For good reasons, countless thousands of international businessmen, wealthy individuals, and others worldwide have an alternative, second passport as an added form of life insurance.
In an unsettled, ever-changing world, acquiring a second citizenship can be a wise decision, an investment in your future. It can act as a protective shield and can extend to your spouse and your children.
There usually is no need to surrender or change your existing national citizenship while you enjoy the benefits of your second passport. Most countries allow what is known as “dual nationality.”
Having and using a second passport should not be viewed as sinister evidence of international criminal intent or illegal tax evasion, but as an intelligent means of defending oneself in the highly dangerous and volatile age in which we live.
Greater Financial Protection
A second citizenship/passport can also serve to reduce your taxes and protect your assets. It allows greater asset protection, stronger financial privacy, higher returns in carefully selected markets, more diversification of investments and among currencies, increased safety and security, both personal and financial, and deferred taxes on annuities and life insurance.
Due to the many restrictions placed on U.S. citizens, opening a foreign bank account becomes much easier if you have a second passport. With an offshore bank account, you can invest in almost any security in the world that’s traded on a major exchange. This includes not only common stocks but also a growing list of foreign exchange-traded funds (ETFs).
Privacy is a huge bonus when you have a second passport. It can protect your identity, keeping your nationality a secret for safety reasons. U.S. citizens abroad are subjected to discrimination and threats, so a second passport, say from Ireland, allows access to countries that generally are not welcoming to U.S. citizens.
Also it avoids the situation of having entry and exit stamps in your U.S. passport from countries your own government doesn’t want you to be in.
A Step on the Path to Expatriation
For U.S. citizens, a second passport has another benefit—it is a prerequisite for legally disconnecting, once and for all, from the U.S. tax system. The only way to eliminate all U.S. tax liability is to end your U.S. citizenship.
By giving up U.S. citizenship, you may be able to live or retire in a paradise of your choice and avoid all, or nearly all, U.S. tax on personal and business income, including most capital gains and estate taxes. In other words, you could pay nearly zero U.S. taxes—as in, never having to pay taxes to the IRS again.
But before you renounce your U.S. citizenship, you must first obtain a satisfactory passport and citizenship from another country.